son.1 XYZ's stock price and dividend history are as follows:Year Beginning-of-Year Price Dividend Paid at Year-End2019$ 185195170185202020212022An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells oneshare at the beginning of 2021, and sells all four remaining shares at the beginning of 2022.Answer is complete and correct.Required:a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-yearrates of return and final answers to 2 decimal places. Do not round other calculations.)Arithmetic average rate of returnGeometric average rate of return$63.753.28666%% b. What is the dollar-weighted rate of return? (Hint Carefully prepare a chart of cash flows for the four dates correspondingto the turns of the year for January 1, 2019, to January 1, 2022. If your calculator cannot calculate IRR, you will have to usetrial and error or a spreadsheet program.) (Round your answer to 4 decimal places. Negative amount should be indicatedby a minus sign.)Answer is complete but not entirely correct.Dollar-weighted rate of return1.6498%

YearBeginning-of-Year PriceDividend paid at year-endAction2019$185.00$6.00Buy 3…

Answered: XYZ's stock price and dividend history…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $5 Year 2018 2019 2020 2021 Beginning-of- Year Price $ 130 144 120 125 An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns 5 5 5 Date b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) Cash Flow % %
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